The New Economics of Sovereign Wealth Funds

The New Economics of Sovereign Wealth Funds is a one-stop guide to the macroeconomic environment within which sovereign wealth funds operate. The book provides a thorough guide to sovereign wealth funds, covering the drivers of the industry, how it operates and grows, the interest from and in Western markets and the pivotal role that sovereign wealth funds play in the world economy.

The activity of sovereign wealth funds has often ignited a political reaction and a protectionist backlash. By going beyond discussions based on misconceptions to analyse state capitalism, this book evaluates the role played by sovereign wealth funds within the dynamics that are reshaping the economic and financial geography in the 21st century.

The book argues that the emergence of sovereign wealth funds represents a major element of the secular shift of power from mature Western economies to vibrant emerging markets. It offers an all-encompassing perspective, from a rigorous analysis of the economic and financial drivers of their growth to an accurate description of how these institutions invest for the long-term in global capital markets in the global economy.

Identifying the drivers of the growth of sovereign wealth funds, the book discusses commodity prices, macroeconomic imbalances and current account surpluses. The book goes on to analyse sovereign wealth funds in the wider global macroeconomic context and examines their capital allocation across regions, asset classes and currencies. The final chapters identify the challenges of sovereign wealth funds in the new regulatory framework and explore how they are increasingly investing in emerging markets. Finally the book provides an overview on how the Western world is reacting to the growing role of state-controlled investment vehicles and the initiatives by international institutions to find a common ground.

Written by two celebrated practitioners working in the industry, The New Economics of Sovereign Wealth Funds presents insights from officials in charge of investing a large pool of assets in global capital markets and includes a preface from John A. Fraser, Chairman & CEO of UBS Global Asset Management.